The bank levy is to be extended to 2021 in a move that will raise €750 million for the exchequer.

Minister for Finance Michael Noonan said a review would take place of the methodology to calculate the levy.

The levy was originally introduced for three years from 2014 to 2016 to allow for a “contribution” from the banking sector to the economic recovery. It currently brings in €150 million a year and is calculated on the basis of DIRT payments made in 2011.

“The scale of the levy over the period is equivalent, for example, to the cost of the new National Children’s Hospital,” Mr Noonan said.